Consumers' inflation expectations are at a record low

A preliminary reading on consumer confidence in
February showed that expectations for inflation are at a record
low.

The University of Michigan's consumer sentiment index showed
inflation expectations 5-10 years ahead fell to a record
low, at 2.4%.

The headline consumer-sentiment index was 90.7, but
it had been expected at 92.3.

"While slowing economic growth was anticipated to slightly
lessen the pace of job and wage gains, consumers viewed their
personal financial situations somewhat more favorably due to the
expectation that the inflation rate would remain low for a
considerable period of time," the survey's Richard Curtin
wrote.

He noted that should inflation rise towards the Fed's 2%
goal, wages would also have to increase to prevent a breakdown in
real incomes.

According to the survey, consumers became less optimistic about
the economy in the year ahead. But in the long run, their
outlook remained unchanged.